Tory Burch and Chris Burch Reach Settlement Agreement

A Guide to Every Dramatic Moment in the "Battle of the Burches"

After four months of legal volleys — including a countersuit, subpoenas on Christmas Eve, and allegations of corporate misconduct — Tory Burch and her ex-husband and business partner Chris Burch have finally settled their lawsuits against each other.
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The drama around this case started over a year ago when Chris opened C. Wonder, which many saw as a threat to Tory's brand. From its outset, the lower-priced line of clothing and accessories was accused of looking too similar to Tory's aesthetic. The resolution to this case doesn't address those similarities and instead focuses on the sale of Chris's stake in the company, much of which went to two new investors. This lessens his power and involvement at the brand, which will hopefully give both Burches some peace.
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So how did they get to this point? A look back at every step of the aptly named Battle of the Burches, here in the gallery.
br>Photo: A still-married Tory and Chris Burch at the opening of a Tory Burch store in Los Angeles in 2005, via Getty.

October 2011: C. Wonder Opens

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The New York Times' Alexandra Jacobs — as well as a number of other critics and reporters — observed that the store and the products in it mirror Tory's signature style. "It's unclear whether this is an amicable homage or a hostile takeover," Jacobs wrote.

The New York Postreported that Tory hired Barclays Capital to help sell off Chris's 28.3 percent stake in the company. (Tory also owns 28.3 percent of the company's shares.) Though the couple divorced in 2006, Chris had remained the cochairman of Tory's board of directors. The deal would have valued the company at $2 billion. Chris's shares would have been worth around $600 million.

WWD speculated that Tory "may be looking into potentially suing her ex-husband for trade dress infringement or usurpation of corporate opportunity." Page Sixreported that the two were negotiating through their lawyers, but that Tory demanded "Chris Burch shut down C. Wonder . . . She is furious and claims he has directly copied her business plan."

The same week, New York Magazine published an in-depth feature story about the two brands, in which Jessica Pressler wrote that "a lawsuit against C. Wonder has almost certainly crossed" Tory's mind. At the time, Burch's corporate office was "compiling photographs of C. Wonder products juxtaposed with Tory Burch products in a large binder — a kind of corporate burn book."

A source toldPage Six that "Tory wants Chris to step down as co-chairman of the board. And she wants him to change his products and his stores completely so there's no resemblance. His products sell at a lower price point, and she feels the comparison is damaging her brand."

Chris complied with Tory's request and stepped down as cochairman, but owning shares of the company kept him on the board. A source said Tory worked actively with Chris to avoid a lawsuit. "Litigation would be the very last resort," the source said.

After months of quiet in the press, Chris sued Tory and her management team, claiming that they interfered with his relationships with suppliers and with the process of selling his shares in the company. He asked the Delaware Chancery Court for unspecified damages and a guarantee that Tory wouldn't be able to stop him from pursuing new businesses. He also asked that Tory be removed from the board of her own company and for the "appointment of new and additional directors to the board to protect the interests of plaintiffs."

Tory had been hopeful that it wouldn't come to a lawsuit. In a story on Brian Williams's show Rock Center filmed before Chris took legal action, Tory talked to reporter Harry Smith about C. Wonder. "I have seen the stuff, and some of it is too referential," she said. "And I think that he's going to be changing that."

"Tory is the one who has always talked to us about her aspirations, and her ideas for growth, how she saw the brand, asked advice on people she might want to bring in," Wintour said. "It's always been, as far as we're concerned, 100 percent Tory's business, and we've never had anything to do with Chris."

"What I find bizarre and nasty, and can't possibly finish well for him, is that he is . . . hurting [her business] by sabotaging it, by copying it," von Furstenberg said. "I don't understand."

Lawyers for Tory Burchfiled a countersuit, claiming that Chris used his knowledge of her company to create C. Wonder, which court papers referred to as a "knock-off" of Tory Burch. The filing offered more info about why the sale of Chris's shares (codenamed Project Amethyst in the investment community) didn't go through. The top three bidders stipulated that Chris wouldn't use the hundreds of millions he generated from the sale to fund C. Wonder, but that agreement was never signed.

During a scheduling conference for the case, Judge Leo Strine of the Delaware Chancery Court — who presided over a case between J.Crew and its shareholders in 2011 — joked that if everyone involved with the case read books by American novelist John Cheever and watched episodes of Mad Men, they'd be "all geared up and in the mood for this sort of drunken WASP fest." (Worth noting: Tory's mother, Reva, is Jewish.)

The cast of Mad Men. Photo courtesy of AMC.

Nov. 16, 2012: The Power of Positive Thinking

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In an interview with CNN reporter Alina Cho, Burch sounded optimistic about finding a solution to the lawsuits, saying: "At the end of the day, my priority is with my business and my children. I have six children with Chris that he and I care about and that's what I think about. But also [there is] my team that I look at and I think this is extraordinary what we have built together. My focus is finding a solution and hopefully we will get there and then we will be better for it at the end."

Tory's legal team accused Chris's lawyers of withholding thousands of documents (like his travel calendar) necessary for the case. Her lawyers said they were "entitled to know whether Chris Burch used confidential financial information from Tory Burch LLC to attract Access (one of the companies represented on Tory Burch's board of directors) and potentially other investors into C. Wonder or one of Chris Burch's other business ventures."

Lawyers for Tory subpoenaed former C. Wonder employees to determine whether the company really copied any Tory Burch products. In return, Chris's lawyers subpoenaed Tory's brother Robert Isen, who works as her president of corporate development, and his wife, Patty Isen, the director of special projects at Anthropologie.

"Chris' team is scrambling with this latest subpoena," a source told Page Six. "It shows that Tory is doing her homework and is reaching into the talent that put together the original C. Wonder concept. He is quite concerned . . . that she is going for the jugular. Things between them are spiraling downward."

Photo: Actress Kelly Rutherford at the opening of C. Wonder's store at Time Warner Center in New York.

The Burches reached a settlement in the waning hours of 2012, bringing the case to an end. In the process, Tory's company acquired two new minority investors: BDT Capital Partners LLC and General Atlantic LLC.

While this resolution doesn't address the similarities between the new brands, it does diminish Chris's power on the Tory Burch board and will ultimately help the company grow.

"Tory and her team have a unique ability to create accessible luxury clothing and accessories that have broad and lasting appeal," said Bill Ford, CEO of General Atlantic and one of Tory's new minority partners. "We look forward to working with the company to continue to build its exceptional brand globally."